EURUSD was temporarily lifted to 1.3693 due to bargain hunters buying up the cheap euro but it was short lived and the single currency soon fell back down to a six month low to touch 1.3555. Greek default fears continued to roil the markets today and speculation is growing that the next aid instalment due in December may be difficult to approve if Greece continues to miss deficit targets. Meanwhile, French banks are bracing for a Moody’s downgrade due to their large holdings of Greek debt.
GBPUSD fell on the back foot of EURUSD as risk aversion also affected the sterling. Cable fell from an early U.S. session high of 1.5882 down to 1.5769. Against euro, sterling gained over 50 pips to erase losses made in the European session.
The Swiss franc was little changed against the euro as the pair remained in an incredibly tight range, mostly flat since the September 6 SNB intervention to put a ceiling of 1.20CHF against the euro. Dollar remained strong against the franc, with USDCHF hovering above 0.8800. However, lingering fears about the outlook of the euro zone debt crisis may put in danger the longer-term effectiveness of the SNB market intervention.
The Canadian dollar dipped to its weakest level since January against its U.S. counterpart as investors sought a safe harbor in the greenback due to Greek default concerns. USDCAD rose above parity to hit 1.0025 in the early New York session. The loonie soon managed to recover some losses as crude oil prices ended their three day decline and rose slightly to USD 88.92 a barrel, lifting the Canadian commodity-linked currency since Canada is an oil producer and exporter.
USDJPY rebounded from a one week low as technicals show that the pair had reached over sold territory. Yen had gained strength earlier in the day as investors rushed to the safe haven currency to protect their assets on concerns of a Greek default. USDJPY rose to 77.37. Meanwhile EURJPY hovered not far from the ten year low reached this morning at 103.88 as the euro continues to be battered by the euro zone debt crisis.
Gold prices fell in New York trading as some investors sold the metal to gain access to liquidity in an effort to cover losses in equities that plummeted today due to mounting euro zone debt concerns and a looming Greek default. Spot gold fell to $1,801.10 from the session open of $1,835.75.